How To Get A Used Car Loan
By: Larry Kearney
There are a number of important facts you should know before you apply for a used car loan.
First you need to order a copy of your credit report. Do you have good or bad credit.
The information in your credit report will give you a better idea of your chances of getting approved for a new or used car loan and your over-all interest rate.
If you have good credit, you should always go to your bank to apply for a car loan. Banks will always offer to you the best interest rates that are available to you anywhere nationwide. Keep in mind, the banks only offer auto loans to individuals that have good credit.
If you have poor credit, your interest rate could be as high as 26%. The result of a high interest rate is that you are going to pay up to $25,000 for a car that you had purchased for $16,000 and your monthly payments could be as high as $375.00 per month.
Getting a used car loan with bad credit is not a good idea, because of the high interest rates. Once you have paid payments for 2 or 3 years, you will still have a balance of more than the car is worth. So this would make it impossible for you to trade the car in without rolling some of your balance of the old car, to your next car.
There are a number a ways to avoid this problem. One way is to get a co-signer that has good credit. This would lower your interest rates to the point that could cause your payments to drop by over $100.00 per month.
Another method of getting approved for a good low rate auto loan is to clean up your credit history.
Pay off as many creditors as you can on your credit report. You can contact each creditor to see if they would be willing to settle by offering to reduce your balance. If the balance on an account is to high for you to payoff, offer to make payment arrangements.
You must do everything you can to get approved for an average or low used car loan.
If you choose to get a high interest auto loan, you will never be able to get a fair trade in on your car. When it is time to trade in your car you will have to add the balance of your first car to your new car purchase. This would increase the new car balance and your monthly payments. Which means that you are going to have to pay more each month for the same type of car that you have just traded in.
Online Used Car Loan Programs
There are a number of companies online that offers new or used auto loan services. Most of them offer bad credit auto loans online with no upfront fees.
The good thing about these types of online programs is that they are going to search for the best lenders that are available nationwide. This would greatly improve your chances of finding a low interest loan. This is better than applying for a loan at a car dealer because the dealer is only going to have a few financing companies to process your loan. The online programs have access to hundreds of loan companies that offer different interest rates.
Once you are approved for a loan from a online financing company, you can still purchase your car from any local dealer in your area. Once you have selected a car, the financing company would send your car dealer a check to cover the cost of your new or used car.
You could be on the road with your new car in just a few days.
Are you about to purchase a new or used car? If you have no credit or bad credit, there are a number of important facts you should know before you try to apply for a car loan. Getting approved for a high interest auto loan could increase your monthly payments by as much as $100.00. http://www.loan98.com/autoloans14.html, http://newcarloans.wordpress.com
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